Kaiju Combat is a monster fighting game from Sunstone Games. Wizards of the Coast is claiming that this infringes the trademark on KAIJUDO, which is a card game they offer. While they have secured the Kaijudo trademark for video game rights as well, "kaiju" is an ordinary Japanese word meaning "strange beast" or "monster" and commonly is used to refer to the genre of Japanese monster movies like Godzilla. It would be ridiculous to claim that a neologism based on that common word would magically grant the trademark holder control over the original common word as well.

WotC had apparently contacted Sunstone earlier about their claims, and Sunstone had their lawyer explain the nature of trademark law and the fact that Kaiju is a common word... and they heard nothing else. Apparently, they assumed that the situation was settled, though I would think that confirming that before launching the Kickstarter might have been a reasonable move. Simon Strange, the owner of Sunstone, told GamePolitics (link above) that he understands the nature of trademark law, and the fact that you're supposed to protect your marks, but he figured that it could be settled between discussions with lawyers, rather than suddenly having his Kickstarter project taken down and all its backers informed of the dispute. And, now, he's worried about legal costs:

"Obviously we can't afford to spend our very limited development budget, which was provided by our backers on Kickstarter, on fighting over a name,"" He says. "But at the same time it would really make me sad if we're forced to change our name just because we can't afford to defend ourselves. I'm still hopeful that it won't come to that."

Maybe Kickstarter should automatically populate projects that are taken down like this with a special "legal fund" Kickstarter while they wait for details to be worked out.